Elon Musk assured bankers they won't lose money on loans for Twitter acquisition: Report

economictimes.indiatimes.com:

Elon Musk reportedly told bankers that they will not lose any money after taking $13 billion in loan to fund his Twitter acquisition last year, reported the Financial Times.

According to the report, despite his assurances, seven banks that lent money to Musk — Morgan Stanley, Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Societe Generale — «are facing serious losses on the debt if and when they eventually sell it».

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The verbal guarantees by Musk «fell sharply after he completed the acquisition last year».

«The banks have held the debt on their balance sheets instead of selling at a steep loss in the hope that X's performance will improve following a series of cost-cutting measures,» the report mentioned.
The debt is split between $6.5 billion of term loans, as well as $6 billion of senior and junior bonds and a $500 million revolver.

There was no guarantee the banks would be able to offload the debt even in 2024, according to the report.

Lenders are unlikely to get even 60 cents on the dollar for the bonds and loans.

Meanwhile, the X platform under Musk has seen its ad share nosediving, and the company may generate $2.5 billion this year, missing the internal targets of $3 billion.

Bloomberg reported last week that ad sales on X are about a half billion lower than anticipated for 2023, as several top advertisers left the platform for his support for antisemitism.

X generated a little more than $600 million in advertising revenue